This article takes a look at the 15 best places to retire in Alabama. If you wish to skip our detailed analysis of the investment landscape surrounding US retirement, you may go to 5 Best Places to Retire in Alabama.
Decoding Retirement Investing
Turns out college students aren’t the only ones prone to leaving things to the last minute – several adults are pretty much on the same track when it comes to saving for their retirement. In the US, there is no legal requirement under which a company has to offer a 401(k) plan to its employees in most states- although companies such as Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN) do offer 401(k) plans with partial matching. Without this requirement, many people miss out on saving for retirement altogether.
In fact, according to Ramsey Solutions, employer-sponsored retirement savings plans are withheld from about a third of US workers, whereas the latest Survey of Consumer Finances reports that a massive 46% of Americans are without a retirement account altogether. All this does not seem very promising, especially with a Northwestern Mutual study revealing that Americans themselves believe they require a whopping $1.46 million for a comfortable retirement.
The question of the hour, then, is how can this disparity between what Americans need in their retirement and what they currently have be solved? Founder and CEO of hedge fund management company Pershing Square Capital Management, Bill Ackman, has a rather unique perspective. Ackman proposes that the US government give every newborn child in the country seven grand. Of course, Ackman doesn’t propose simply handing the money away. Instead, he details putting $7,000 into an account when a child is born, barring it from withdrawals, exempting it from taxation, using it in index fund investment, and letting the amount compound.
“We can’t wait until people start creating an IRA or a 401(k) by the time they’re, you know, 25 or 30 or 35 … Just because of the laws of compounding. That extra 25 years is very, very material.”
-Bill Ackman, Founder and CEO, Pershing Square Capital Management
According to numbers by the Centers for Disease Control and Prevention, nearly 3.6 million children were born in the US in 2023. If Ackman’s advice is implemented, the cost comes out to about $25 billion. While this number may seem shockingly high, it’s a drop in the ocean compared to the US government’s 2024 fiscal year spending which included a national defense budget of $433 billion.
As for more real avenues, there are other paths that individuals can explore for retirement savings in the case of their company not offering a 401(k) plan. Some options that Americans can look towards include traditional IRAs, Roth IRAs, and health savings accounts. Each of these has its own benefit. For instance, traditional IRAs allow you to accumulate tax-advantaged retirement dollars, Roth IRAs allow for tax-free withdrawals and growth during retirement as well as flexibility as there are no minimum distributions, and health savings accounts are also known for their tax-free growth. Of course, these are just some of the retirement savings options available to individuals, and the investment world is much more vast. So, even if you don’t enroll in plans such as those offered by Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN) employees, all is not lost when it comes to saving and investing for your Golden Years. There’s no age limit to it either – even if you’ve reached your 50s, there are still steps that you can take to secure your retirement. For possible ideas, you can refer to retirement savings tips for 55-to-64-year-olds.
Is An Alabama Retirement the One?
Speaking of saving and investing, the amount that you accumulate for your retirement is directly tied to the location of your retirement. Consider Alabama, for instance – $2,500 a month would fare very differently than in states such as California or New Jersey. Starting off with one of the biggest monthly expenses, the state of Alabama is extremely accommodating when it comes to rent. Zillow Group, Inc. (NASDAQ:Z) lists the median price for a one-bedroom rental in Alabama to sit at $925 – a whole 42% lower than Zillow Group, Inc. (NASDAQ:Z)’s reported national median of $1,600.
The state is also tax-friendly toward retirees. Not only is Alabama among the states that won’t tax Social Security income in 2024, but private and public pensions are also exempt from taxation. On the non-financial side, there are other benefits to an Alabama retirement with climate being one of them. The state enjoys a temperate humid subtropical climate, ideal for retirees who want to avoid extreme weather conditions. All in all, retiring in Alabama is a good idea.
To facilitate present and potential retirees in navigating the move to Alabama state, we have compiled a list of the 15 best places to retire in Alabama.
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Methodology
To compile this list of the 15 best places to retire in Alabama, we consulted several sources including our lists on retiring to Alabama, Cheap and Beautiful Places to Retire in the US, Safest Places to Retire in the US, Best US Cities to Retire with $1 Million in Retirement Savings, as well as external sources such as Niche, NewHomeSource, Movoto, Unbiased, and Retirable.
Once a list of places was compiled, we ranked them across multiple factors, namely, cost of living, livability scores, median house price, and environmental scores. For this article, livability scores were taken from Area Vibes, median house prices were taken from Redfin Corporation (NASDAQ:RDFN), and the cost of living index and environmental scores were our own. To ensure that the recommended places were of a suitable living standard, we removed places with a livability score below 60 and only included places that were above the US average environmental score of 56.5. A cumulative score was assigned – livability scores and environmental scores were given double weightage – with the 15 highest-scoring places making our list of the 15 best places to retire in Alabama. For places that gained an equal score, their livability scores were used as a tie-breaker. The resulting list is presented in ascending order.
By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.
Here are the 15 best places to retire in Alabama:
15. Mountain Brook
Insider Monkey Score: 62
Livability Score: 64
Cost of Living Index: 98.5
Median House Price: $1,060,100
Environmental Score: 57.5
Starting off our list of the best places to retire in Alabama is the Jefferson County city of Mountain Brook. A Birmingham suburb, Mountain Brook is known to be among one of Alabama’s wealthiest places and is home to several corporate executives and professionals. The city is often referred to as the ‘tiny kingdom’ and residents can experience a lifestyle akin to the name. Senior citizens who choose to spend their retirement in Mountain Brook can visit the Cahaba River Walk Park, the nearby Birmingham Zoo, and the famed Another Broken Egg cafe.
14. Foley
Insider Monkey Score: 68
Livability Score: 61
Cost of Living Index: 93.3
Median House Price: $312,808
Environmental Score: 65
Located in Baldwin County, the city of Foley is one of the best places to live in Alabama for retirees. A beautiful retirement destination, Foley is an especially good find for senior citizens who have the retail bug. Home to the Tanger Outlets, Foley residents have access to over 120 outlet stores – a dream for any shopping enthusiast. Residents can also visit the Tropic Falls at OWA amusement park and the nearby Gulf Shores Public Beach for some water-filled fun.
13. Tuscumbia
Insider Monkey Score: 73
Livability Score: 62
Cost of Living Index: 82.2
Median House Price: $278,000
Environmental Score: 58.5
Up next is Tuscumbia, a city with a population of just over 9,000 residents set in Colbert County. Despite being a small city, Tuscumbia has served as the home of several notable personalities, including author Helen Keller, U.S. Senator Howell Heflin, and Governor Robert Lindsay. Senior citizens can busy themselves with a range of indoor and outdoor activities with some of the most notable being the Tuscumbia Spring Park, the Alabama Music Hall of Fame, and the Howard Chappell Stadium.
12. Vestavia Hills
Insider Monkey Score: 75
Livability Score: 83
Cost of Living Index: 91
Median House Price: $515,000
Environmental Score: 57
One of the best places to retire in Alabama for retirees is the city of Vestavia Hills. With a relatively affordable cost of living that is 9% below the national average and a high livability score of 83, Vestavia Hills residents are able to experience the best of both worlds. The city carries the essence of Southern culture, and senior citizens who make a retirement-time move to the place will find it welcoming and hospitable. Residents can spend their days at the Vestavia Bowl Bowling Alley, the Old Overton Golf Club, and, of course, the Cajun Seafood House where they can tuck into a delicious seafood dinner.
11. Prattville
Insider Monkey Score: 76
Livability Score: 75
Cost of Living Index: 89.4
Median House Price: $235,000
Environmental Score: 57
A dual-county city, Prattville is located in the counties of Elmore and Autauga. With a sparse suburban feel, Prattville held a population of just under 39,000 at the time of the last United States Census. Known as the ‘Fountain City’, Prattville features a number of artesian wells. With a hospital, post office, and grocery stores located in the city, residents will find all that they need here.
10. Auburn
Insider Monkey Score: 77
Livability Score: 78
Cost of Living Index: 89.3
Median House Price: $379,900
Environmental Score: 56.5
A college town, the city of Auburn is home to the Auburn University. One of the largest cities on our list, the Lee County city boasts a population of over 80,000 residents as per the last United States Census. The city offers residents lots to entertain themselves with. Some of Auburn’s best spots include the Chewacla State Park, the Jordan-Hare Stadium, The Jule Collins Smith Museum of Fine Art, and the Donald E. Davis Arboretum.
9. Gulf Shores
Insider Monkey Score: 83
Livability Score: 68
Cost of Living Index: 94.8
Median House Price: $435,000
Environmental Score: 71.5
Located on the Gulf Coast, the city of Gulf Shores is the perfect retirement destination for senior citizens who are looking for a beach side retirement. The city has much to offer and with one of the best environmental scores on our list, senior citizens can rest assured when it comes to local air and water quality. Not only does this allow residents to lead a healthier retirement, but it also helps them from a financial perspective as they may be able to cut down on their medical bills. Residents can also visit the local museum, brewery, and zoo for other activities.
8. Tuscaloosa
Insider Monkey Score: 83
Livability Score: 76
Cost of Living Index: 91.2
Median House Price: $267,500
Environmental Score: 58.5
With a population of over 110,000, Tuscaloosa is the ideal retirement spot for senior citizens who want to experience the big city life during their Golden Years. The city is known for its status as a college town, being home to Alabama’s largest public university – the University of Alabama. Residents can benefit from the city’s cost of living which is 8.8% lower than the national average along with its high livability score which indicates a better quality of life.
7. Montgomery
Insider Monkey Score: 84
Livability Score: 64
Cost of Living Index: 84.5
Median House Price: $187,000
Environmental Score: 59.5
Our next pick is the state of Alabama’s capital – the city of Montgomery. Located in a county of the same name, Montgomery is one of the best places to retire in Alabama on a budget as the city carries a cost of living that is more than 15% lower than the national average. One of the largest cities on our list, Montgomery’s population neared the 200,000 mark at the time of the last United States Census. A historic city, Montgomery was the backdrop for the Montgomery Bus Boycotts.
6. Fairhope
Insider Monkey Score: 85
Livability Score: 76
Cost of Living Index: 95.3
Median House Price: $435,990
Environmental Score: 67
Next up on our list is the Baldwin County city of Fairhope. A city on the pier, Fairhope is located on Mobile Bay’s eastern shoreline – allowing residents to soak in majestic water views. A resort community, the city attracts tourists from all around and offers a range of entertainment outlets. Residents and tourists alike can visit the Fairhope Municipal Pier, Fairhoper’s Community Park, and the Fairhope Museum of History. To catch a delicious bite, residents can dine at Sunset Pointe at Fly Creek Marina.
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Disclosure: none. 15 Best Places to Retire in Alabama is originally published on Insider Monkey.